BMP4002 Business Law: UK Legal Context & Business Structure Report

This report provides an overview of the legal context for business organizations in the UK, focusing on key sources of law and different business structures. It discusses the importance of business law in maintaining order, resolving disputes, and protecting rights. The report covers various legal aspects, ...Read More

Business Management
BMP4002 Business Law
Assessment 2
Report describing the key sources of laws
as the legal context for business
organisations in the UK
:
1

Table of Contents
Introduction................................................................................................................................3
Businesses & Organisations in the UK........................................................................................3
The legal business structure of UK companies..........................................................................4
Recommendations for IOM Solutions........................................................................................7
References..................................................................................................................................8
2

Introduction
Business organisation refers to an entity that are formed for carrying on commercial
purpose. Business law or commercial law refers to the body of law that governs commerce
and business and it also be considered as branch of civil law that deals with issues of private
law as well as public law (Harroch and Smith, 2021). UK is an important area as it manages
the growth and practices in which they focus on the management of all income generation as
well as the turnover to be implied through generalisation and management. There are
different types of legal business structure exist that are available for companies within UK
that covers sole trader, general partnership, partnership and limited liability. The following
report is about IOM solution which is sole trading business of UK that sells electrical parts to
the local garages. The owner of the company wants to expand its business and wants
guidance related to appropriate form of business ownership. In the following report, it covers
the different types of laws as well as business formation as well as provides recommendation
for the organisation.
Businesses & Organisations in the UK
Within UK various forms of business are being made as it all formulate for managing
the growth as well as working principles which has been sets according to laws and principles
which has also being abided. Within an organisation, various of operations and functions are
operated in order to manage their daily working which includes human resources, finance,
marketing, accounting and so on. Some laws and regulation are imposed business
organisation that includes employment law, company law and intellectual property rights.
Employment law is focus on the protection of laws and rights related to employees which
helps in managing their work as well as general compliances with the help of effective
management and their recruitment, anti-harassment laws, safety at work as well as other
health issues (Guttery and Poe, 2018). Company law describes the laws and rules which helps
in managing the perpetual succession as well as it also helps in incorporating the artificial
personality by supporting the legal structure for framing the work according to the protection
is provided to the members. Intellectual property right helps in maintaining the laws as well
as brand image of the company along with the market recognition and other factors that
describes the original work of the organisation.
All the function of business laws are used to maintain the commercial implications
along with the transaction in order to maintain their intense impacts and general rules. In
3

many organisations, information technology is used for framing the record keeping as well as
the methods by which records are track as well as record are being aligned properly. It also
helps in making the systematic allocation of work as well as manage the infrastructure. It is
important for every business organisation to address the secondary liability principles related
to employees while assigning some roles and responsibilities to them by the managers or
employers. All the task of organisation should be complied with the assigned task which has
been given by the other party (Wald, 2018). This is basic servant liability which helps in
protecting the employees from being punished for the others misconduct. It has been shown
that so many contractual terms as well as tortious liability are framed for the business. The
director of the company needs to conduct some general duties in order to manage their
business as well as other operations and functions as it also helps in executing the decision
making and judgement according to all the laws. They also need to make focus on protecting
the rights of employees as well as avoiding the conflicts that are mainly caused in between the
organisation. It implies that no directors of the organisation have rights for holding the
personal profit business in which they have to manage their contemplation as well as working
in better manner. For formulating and starting a business, Memorandum of Association and
Article of Association has been required in all the business. AOA are used to manage and
regulates the rules regarding to all directors, shareholders as well as secretary of the
organisation whereas MOA covers the formulation of the working as well as legal statements
related to the company.
The legal business structure of UK companies
In business structure of the organisation, many responsibilities as well as management
are required to manage and overlook (Currier, Eimermann and Campbell, 2020). In order to
frame and creates the systematic production and growth of the company certain principles are
required such as accounts management, budgets, financial aspects, marketing and so on. In
context of IOM Solution, for providing an effective recommendation, different types of legal
business structure within UK are described below:
Sole Trader
This refers to a business which has been aligned, conduct all the working as well as
managed all the functions by the single individuals. It has been identified that the business
structure which has been followed in this type of business is small as well as all the mutual
applicability and liabilities are implied to the single person. The sole traders need to take all
the decision by themself as well as they do not need to share profit from other person. The
4

sole traders are also having unlimited liability in which responsibilities of all the debt has
been taken by them. Some of its advantages and disadvantages are mentioned below:
Advantages- It provides full access and control of the whole business to single
business as well as the retention of the business management has been conducted by them. In
this type of business practices, legal issues are not to be seen. Along with this it also manages
the up-lined working by the framing of all the management and the views.
Disadvantages- All the operational burden has been managed by the sole trader. They
also consist the workload should be managed and framed by them. It has been also identifying
that all the unlimited liability has been carry by the sole traders along with the risk which has
been incorporated in the business.
General Partnership
This refers to a business in which two and more individuals are ready in order to
manage the business operations together as well as share the common liabilities while
performing their responsibilities (Arvidsson, Arvidsson and Harrison, 2019). It assists is
managing the loss, profit, shares as well as the liabilities which has been structured by the
partners. It includes all those areas where shares general management as well as earning in
between the partners. Some of its advantages and disadvantages are described below:
Advantages- These types of business structure cover less paper works as well as it
also shows that there is no taxable areas are being covered. It also makes partners to manage
and address the roles and responsibilities equally in order to reduce the
Disadvantages- It has been identified that general partnership is not that effective
structure in order to attract all the investors for the money as well as it also contains certain
unlimited liabilities which also helps in managing the task as well as all the actions that
required for all the partners.
Partnership
This describes those business organisations in which two or more individual mutually
consent in order to share common liabilities, loss, profit and many more. It has been found
that many persons are ready in order to manage as well as conduct all the operations together
for achieving their common goals (Veliotis, 2019). In this type of business organisation, the
organisational structure is managed by all the partners. It also states that the partners have to
share common rights and liabilities as well as always try to manage all the loss/ profit and
other responsibilities commonly. The taxation framed in the business should be managed by
5

them as well as it provides the rights to the partners for enforcing all the responsibilities and
liabilities mutually. The partners of the company need to carry the loss and responsibilities
commonly in order to manage their business in proper manner. It advantages and
disadvantages are described below:
Advantages- The transactions are easy and flexible business management which
helps in managing the business in proper manner (Kreutzer, 2021). There is less paper work
as well as minimum burden which helps in managing the capital sharing and investment.
Disadvantages- It contain difficulty in order to transfer the ownership as well as
partners has unlimited liability. The partnerships is made for limited period of time. Risk of
disagreements as well as friction in between the partners and management has been found
with in partnership.
Limited Liability
It includes all the legal task and responsibilities that provides proper safety and
protection to the ownership in order to managed the business in better manner. The members
of the organisation are allowed in order to manage the business operations by themselves as
well as can involve in the daily transaction of the company (Brown and Scott, 2019). As
there is no limitation on the maximum number of members involved in the business
organisation. The profits and losses of the business are thoroughly passed in between the
members within limited liability. There is no personal liability for the owner of limited
liability company for any obligations. Some of its advantages and disadvantages are described
below:
Advantages- There is no restrictions on the numbers of members are allowed in
limited liability company as well as pass taxation thoroughly. It provides flexibility to the
members in structuring the management of the company (Budhwar, Varma, and Kumar,
2019). The paperwork does not require required that much and contains more formalities in
corporations. The responsibility for the debts and liabilities are not provided to the owner.
Disadvantages- It is too expensive from the sole proprietorships as well as general
partnership. The transfer of ownership is harder than a corporation as well as comported for
limited life period. The owners of the company found difficulty in order to raise the capital.
There no perpetual existence of the company in which it can be cease on the death of
members.
6

Recommendations for IOM Solutions
From the above discussion, it has been recommended to the Sole trader of IOM
solutions to use limited liabilities legal business structure in order to grow its business for its
demand and employees in order to exploit opportunities in better manner. The owners of the
company need to allows other members in order to incorporated in their business. As its
makes their business as separate legal entity and helps in protecting the members from the
personal liability. This will also help in avoiding the double taxations in which the income of
the company treated as the income of the members.
Conclusion
From the above mentioned report, it has been concluded that business law is important
for maintaining the order, establish generally accepted standards, resolve disputes, protect the
rights and liberties when it comes for the businesses as well as its relations with government
authorities, another businesses as well as the customers. Business structure is important for
the company in order to analyse and operates their day-to-day business operations in better
manner. The business law focus on company law, employment law as well as intellectual
right in order to make company to operate their business in legal manner.
7

References
Books and Journals:
Harroch, R.D. and Smith, G.C., 2021. Start-Up & Emerging Companies: Planning,
Financing & Operating the Successful Business. Law Journal Press.
Guttery, R.S. and Poe, S.L., 2018. Using a cannabis real estate investment trust to capitalize
a marijuana business. Journal of Real Estate Portfolio Management, 24(2), pp.201-
206.
Wald, E., 2018. The contextual problem of law schools. Notre Dame JL Ethics & Pub.
Pol'y, 32, p.281.
Currier, K.A., Eimermann, T.E. and Campbell, M.S., 2020. The study of law: A critical
thinking approach. Wolters Kluwer Law & Business.
Arvidsson, S., Arvidsson, S. and Harrison, 2019. Challenges in managing sustainable
business. Cham: Springer International Publishing.
Veliotis, S., 2019. Equating US tax treatment of dividends and capital gains for foreign
portfolio investors. American Business Law Journal, 56(2), pp.345-390.
Kreutzer, R.T., 2021. Toolbox für Digital Business. Springer Books.
Brown, E. and Scott, I., 2019. Belief v. belief: Resolving LGBTQ rights conflicts in the
religious workplace. American Business Law Journal, 56(1), pp.55-113.
Budhwar, P.S., Varma, A. and Kumar, R. eds., 2019. Indian business: Understanding a
rapidly emerging economy. Routledge.
8